Have you wondered about those gold chips on the new credit cards? Seen people using them yet?
These new smart cards, chip cards, EMV cards, and/or chip-enabled cards use a small, embedded computer chip known as EMV (Europay, MasterCard, and Visa) technology to authenticate transactions.
European countries have used this anti-fraud technology for years, but it is finally coming to America to combat heightened security concerns due to large data breaches. The EMV technology makes it harder for thieves to counterfeit credit cards. Current American cards use a static magnetic strip, making it relatively easy for fraudsters to obtain the information needed to repeatedly misuse a card. With the EMV chip, a unique transaction code is created for each and every transaction, making it much more difficult to misuse use a credit card account.
Credit cards with EMV technology are not swiped like traditional cards. Instead, they need to be “dipped” into a credit card register or scanned using near field communication. A consumer then waits for the card to communicate with the store’s payment system and their bank to verify the card and create a unique transaction code. Chip cards will also have magnetic strips so they can be swiped at retailers not yet equipped with the new chip card payment devices.
Retailers across America are rapidly undergoing in-store enhancements to read these new chip cards. By the end of 2015, 59% of retail stores are expected to have deployed EMV technology.
According to Smart Card Alliance, approximately 120 million Americans have already received a credit card with an EMV chip. By the end of 2015, it is estimated that 575 million smart cards (debit and credit) will have been issued.
Find out more information about EMV technology.